Posted at 14 June 2023 / Categories Market Roundups
Market Roundup
•Fed keeps rates unchanged, says an extra 50-bps hike coming
•Fed expects fed funds to reach 5.6%
•Fed hike odds hike in July at more than 70%
•U.S. producer prices fall more than expected in May
• US May PPI (YoY) 1.1%,1.5% forecast,2.3% previous
• US May PPI ex. Food/Energy/Transport (MoM) 0.0%,0.2% previous
• US PPI (MoM) -0.3%,-0.1% forecast,0.2% previous
• US May Core PPI (MoM) 0.2%,0.2% forecast, 0.2% previous
• US May PPI ex. Food/Energy/Transport (YoY) 2.8%, 3.4% previous
• US May Core PPI (YoY) 2.8% ,2.9% forecast, 3.2% previous
•US Crude Oil Inventories7.919M, 1.482M forecast,-0.451M previous
•US Gasoline Inventories 2.108M, 0.637M forecast,2.746M previous
•US Cushing Crude Oil Inventories1.554M ,0.922M forecast,1.721M previous
•US Fed Interest Rate Decision 5.25%,5.25% forecast,5.25% previous
•US Interest Rate Projection - 2nd Yr (Q2) 3.4%,3.1% previous
•US Interest Rate Projection - 1st Yr (Q2) 4.6% ,4.3% previous
•US Interest Rate Projection - Longer (Q2) 2.5% ,2.5% previous
Looking Ahead Economic Data(GMT)
• 01:30 Australia May Unemployment Rate 3.7% forecast,3.7% previous
• 01:30 Australia May Full Employment Change -27.1K previous
• 01:30 Australia May Employment Change 15.0K forecast,-4.3K previous
•02:00 Chinese May Unemployment Rate 5.2% forecast,5.2% previous
•02:00 Chinese May Industrial Production (YoY) 3.8% forecast,5.6% previous
•02:00 Chinese May Chinese Industrial Production YTD (YoY) 3.6% previous
•02:00 Chinese May Retail Sales (YoY) 13.7% forecast, 18.4% previous
•02:00 Chinese May Chinese Retail Sales YTD (YoY) 8.46% previous
•02:00 Chinese May Fixed Asset Investment (YoY) 4.4% forecast,4.7% previous
Looking Ahead Events and Other Releases (GMT)
• No events ahead
Currency Summaries
EUR/USD: The euro shed early gains against the dollar on Wednesday after the U.S. Federal Reserve kept interest rates unchanged, as was widely expected, but forecast another 50 basis points in hikes by the end of the year. Fed kept rates at the 5.00%-5.25% range but in its new summary of economic projections indicated a stronger-than-expected economy and a slower decline in inflation will result in a likely rise in borrowing costs by another half of a percentage point by the end of this year. Immediate resistance can be seen at 1.0838(50%fib), an upside break can trigger rise towards 1.0851(Higher BB).On the downside, immediate support is seen at 1.0790(5DMA), a break below could take the pair towards 1.0767(23.6%fib).
GBP/USD: Sterling initially gained but gave some ground against dollar after the Federal Reserve held interest rates steady, as expected, but signaled that borrowing costs will increase by another 50 basis points (bps) by end-December. The rate-setting Federal Open Market Committee (FOMC) in a unanimous policy statement issued at the end of its latest two-day meeting, said holding the target (interest rate) range steady at this meeting allows the committee to assess additional information and its implications for monetary policy. Immediate resistance can be seen at 1.2680 (23.6%fib), an upside break can trigger rise towards 1.2724(Higher BB).On the downside, immediate support is seen at 1.2598(5DMA), a break below could take the pair towards 1.2560(38.2%fib).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Wednesday, pulling back from an earlier two-month high, as oil prices fell and investors weighed the Federal Reserve's decision to pause interest rate hikes. The Fed kept interest rates unchanged as expected but signaled in new economic projections that borrowing costs will likely rise by another half of a percentage point by the end of this year.The loonie was trading nearly unchanged at 1.3315 per U.S. dollar, after touching its strongest intraday level since Feb. 2 at 1.3269.Immediate resistance can be seen at 1.3360 (9DMA), an upside break can trigger rise towards 1.3404 (38.2% fib).On the downside, immediate support is seen at 1.3291(23.6% fib), a break below could take the pair towards 1.3259 (Lower BB).
USD/JPY: The U.S. dollar declined against Japanese yen on Wednesday after the U.S. Federal Reserve kept interest rates unchanged, as widely expected, but pointed to more rate hikes down the year. The Fed, in new economic projections, signalled that a stronger-than-expected economy and a slower decline in inflation will result in a likely rise in borrowing costs by another half a percentage point by the end of this year. Earlier on Wednesday, data showed U.S. producer prices fell more than expected in May, signalling inflation was cooling. Data on Tuesday showed consumer prices moderated last month. Strong resistance can be seen at 140.24 (23.6%fib) an upside break can trigger rise towards 140.73(Higher BB).On the downside, immediate support is seen 139.71(5DMA), a break below could take the pair towards 138.86(June 9th low)
Equities Recap
European shares rose on Wednesday, supported by banks and miners, ahead of a broadly priced-in pause in interest rate hikes by the U.S. Federal Reserve.
UK's benchmark FTSE 100 closed down by 0.10 percent, Germany's Dax ended up by 0.47 percent, France’s CAC finished the day up by 0. 52 percent.
U.S. stocks ended mixed on Wednesday after the Federal Reserve kept U.S. interest rates unchanged but signaled in new economic projections that borrowing costs will likely rise by another half of a percentage point by the end of this year.
Dow Jones closed down by 0.68 percent, S&P 500 ended up by 0.08 percent, Nasdaq finished the day up by 0.39 percent.
Treasuries Recap
U.S. Treasury yields moved higher on Wednesday after the Federal Reserve kept interest rates unchanged, as was widely expected, but forecast another 50 basis points in hikes by the end of the year.
The yield on 10-year Treasury notes was up 0.4 basis points to 3.843%. The 10-year yield was on track to snap a three-session streak of gains.
The yield on the 30-year Treasury bond was down 3.3 basis points to 3.908%
Commodities Recap
Oil prices fell 1.5% on Wednesday after the U.S. Federal Reserve projected more interest rate hikes this year, worrying markets about demand just hours after government data showed an unexpected, large build in U.S. crude oil stocks.
Brent crude futures settled $1.09, or 1.5%, lower at $73.20 a barrel, while U.S. West Texas Intermediate (WTI) crude closed $1.15, or 1.7%, lower at $68.27.
Gold prices pared gains on Wednesday after the U.S. Federal Reserve kept interest rates unchanged, as widely expected, but pointed to more rate hikes down the year.
Spot gold was up 0.3% at $1,949.89 per ounce by 03:03 p.m. EDT (1903 GMT). U.S. gold futures settled 0.5% up at $1,968.9.